Free Business Plan Template and Guidelines for Small Businesses

This article gives you our free business plan template and the step guidelines you need to put your own in place. A good business plan will help you to define your business focus, get your team on-board and measure your progress against your goals.

If you want to make things easy for yourself, you could use a business planning tool to create a professional business plan instead. We recommend Liveplan, which is designed for small business and comes with 500 sample business plan templates.

Free Business Plan Template

If you’re thinking about upgrading your business plan, or you’re setting up your own business for the first time, getting your business plan right is crucial to your success. Check out our free business plan template and guidelines below:

(Note: If you download either doc, you can copy and save
as your own and then edit the content as you wish)

What is Business Planning and Why is it Important?

OK, so you’ve got an excellent business idea and you’ve decided not to waste any time turning it into a successful business. But one thing most entrepreneurs will agree on is that there’s a lot more needed than a good idea to create a successful business. Most argue that good ideas contribute 10% to your success, the other 90% comes from how well you execute your business concept.

Thinking through how to execute your business idea is generally called business planning. A business plan is the written document that summarises your thinking. It will probably take weeks, or even months, to complete your research and write a robust business plan. And even if you think your plan could be still be improved, it vastly improves your chances of success to have some kind of plan in place rather than no plan at all.

The best business plan templates are simple, straightforward and no longer than absolutely necessary. A business plan is much easier to tackle in small chunks. This is why most business plans are divided into logical sections. You can use the information in each section of the free business plan template to help you complete each section.

Of course there’s no guarantee that your business will work. However, research suggests that a good business plan will increase your chances of creating a successful business by 30% so let’s get started!

Section 1: Executive Summary

1.1 Business Summary

Insert a concise summary of your plan in this part of your business plan template. This should not exceed 150 words or three short paragraphs. The purpose of this summary is to give the reader a taster of what to expect if they were to read the plan in detail. For example, the summary might explain the purpose of the business, the market that it will operate in and the timescale covered by the business plan. It might also highlight the key challenges the business plan will have to overcome and the experience of the business owner(s).

1.2 Business Aims

Insert a brief summary of the overall business aims in this part of your business plan template. Usually small businesses have 3-5 key aims or objectives. This helps you to maintain focus and to remember your key objectives without the need to refer to your plan. Each aim or objective needs to be capable of being measured so that you can assess your progress in delivering your business plan over time. Using SMART (Specific, Measurable, Achievable, Relevant and Timed) objectives will help you to create a better business plan, and one that you are more likely to deliver.

1.3 Financial Summary

Insert a summary of your key financial performance numbers in this part of your business plan template. For instance, what is the total sales revenue that you plan to achieve in year one? What will be your total costs? What will be your profit or loss? How much money will you need to invest? When do you expect the business to breakeven and start to make a profit?

1.4 Your Business Name

Insert the name of your business in this part of your business plan template. Your business name wants to reflect your business purpose to some extent. Our purpose is to provide our readers with valuable, free small business knowhow to help them become more profitable. That’s why Smallbiz Juice works well for us. If an online presence is important for your business, you’ll need a business name that also works as a website address. For instance, our business is called Smallbiz Juice and our website URL is www.smallbizjuice.com.

1.5 Your Business Strapline

Insert your strapline in this part of your business plan template. This should be no more than 3 to 7 words. The purpose of a strapline is to highlight your customer benefit, or it could simply describe what you do in more detail. At Smallbiz Juice our strapline is: “Keeping it Fresh.” We think this works well as our purpose is to keep small business owners up to date.

1.6 Your Elevator Pitch

Insert your elevator pitch in this part of your business plan template. This unpacks your business purpose a little and explains what the benefit is to your customers. This of your elevator pitch as a concise answer to the question, “So what does your business do?” For example, a business plan software business could have an elevator pitch like this: “We make business planning and performance tracking tools for small business owners so they can more easily raise funds, develop budgets, and track their performance.”

Section 2: Founder’s Track Record

2.1 Founder’s Motivation

Why do you want to run your own business? You could be starting the business on your own, or you may be going into business with others. Either way, in this section of your business plan template you need to describe how your business idea came about. Then go on to explain what has motivated you to transform it into a business.

2.2 Previous Work Experience

Insert in this part of your business plan template what experience is required to run this business. Does your team have all of the experience that is required? Or do you need to consider adding other talent to the team?

2.3 Training

If you believe that experience gaps can be overcome through training, insert how you intend to get the training that you require.

Section 3: Customer Proposition

3.1 What are You Going to Sell?

Are you going to sell a product or service, or both! In this section of your business plan template, you need to insert a specific and accurate description of what you intend to sell. It can also help to explain what you are not going to sell in order to create the boundaries of your business focus. For instance, we’re going to sell high quality coffee, tea and water, but we are not going to sell juices at the start.

3.2 Product and Service Descriptions

Describe the different types of product/service you are going to be selling in this part of your business plan template. Using the same coffee bar example, you’ll be selling coffee, but what kind of coffee? Is it fresh? ground? Where is it sourced? Are you going to offer different types of coffee bean or just the one? Will the coffee allow you to serve a range of different coffee options? For instance, mocha, flat white and expresso?

3.3 Staged Roll-out

If you are not going to sell all your products/services at the start, explain why not and state when you will start selling them in this part of your business plan template. Following the example above, I might decide to start selling coffee, tea and water. Then once I’m up and running, I intent to add cakes, pastries and juices to expand my offering. The reason for staging this is to protect the quality of my offering at the start.

Section 4: The Market

4.1 Customer Focus

In this part of your business plan template, you need to describe your customer base. Given how important passing foot traffic is to a coffee shop, this might involve research to find the right location and to estimate the volume of customers you require to be profitable.

4.2 Typical Customers

In this part of your business plan template, you need to narrow your focus to provide an accurate description of your typical customer. These are the customers most likely to purchase your products or services. Understanding how they tick can help to ensure that your business is well placed to succeed before you even open your doors for business. For instance, if you are selling high end coffee, you may want to prove that the persona of your typical customer is one that values quality coffee and is prepared to pay for it on their way to work.

4.3 Customer Concentrations

Insert your understanding of where your customers are based in this part of your business plan template. If you’re business is going to trade online, location may be less important, but you might want to understand the communities that they participate in. And if you are planning to trade as a shop, you need to have a good grasp of your location, the distance you can expect customers to travel to your outlet and what passing traffic you can rely on.

4.4 What Channels do your Customers Attend?

Insert your understanding of the channels that you can use to connect with your typical customers in this part of your business plan template. For example, if your customers typically search to find services like yours online, you may want to consider Google Adwords as a method to targeting new business.

4.5 Purchasing Triggers

What prompts your customers to buy your product/service? Insert your understanding of what motivates your customers to buy your products or services in this part of your business plan template. If you do not have customers yet, then researching your competitors’ customers will help you to understand what triggers them to make a purchase. Common factors will include price, branding and personal customer service.

Section 5: Market research

5.1 Key Findings from Desk Research

Insert in this part of your business plan template the key findings of your desk research. Desk (or internet based) research can cover a wide range of information that will help to ensure that you make plans based on facts rather than assumptions, which could later be proved wrong and undermine your business plans. We recommend conducting customer research, competitor research, pricing research and supply partner research as a bare minimum.

5.2 Key Findings from Customer Questionnaires

Once you have completed desk research, it makes sense to delve deeper to gain a much more detailed understating of your typical customers. Insert the key findings of your customer questionnaires in this part of your business plan template. If you are already trading, you can build a customer survey in a survey tool like Survey Monkey and get a much more concrete picture of what drives your customers buying decisions.

5.3 Key Findings from Test Trading

If you are starting a new business, insert the key findings of your test trading in this part of your business plan template. Test trading makes a lot of sense, especially if you want to prove your business case before investing more time and money. If you are seeking funding, test trading will make your business much more likely to attract funds.

Section 6: Marketing Strategy

6.1 How are you Going to Generate Customers?

In this part of your business plan template, you need to explain how you are going to generate new customers. This is often an area where new businesses fall down. The question you need to answer here is where your typical customers will come from once you have depleted your personal network of contacts. Three common sources of new customer leads for B2B businesses include: online advertising, cold calling and customer referral. Whereas B2C businesses may be more dependent on online advertising, passing traffic and customer promotions.

6.2 Why Have you Chosen this Marketing Method?

For each marketing method you have chosen above, explain in this part of your business plan template why you have chosen it over the other options that are available to you.

6.3 How Much will it Cost?

For each marketing method you have chosen above, explain the cost of customer acquisition i.e. how many leads do you need to pay for at what cost to generate one new paying customer?

Section 7: Competitor Analysis

7.1 Table of Key Competitors

Insert a table of all of the competitors you expect to meet in the marketplace in this part of your business plan template. For each, list their name, their website URL, the relevant price of their product(s)/service(s), their key strengths and key weaknesses.

7.2 Newco SWOT analysis

Insert a SWOT of your business in this part of your business plan template. A SWOT analysis is a comparison of your business’ relative Strengths, Weaknesses, Opportunities and Threats in the marketplace in light of the competition.

7.3 Newco USP

Insert your business USP in this part of your business plan template. A USP is a Unique Selling Point of your business in the marketplace in light of the competition. Your business USP will be key to brand messaging for sales promotions, advertising and any activity targeting the generation of new customers. As a result, your USP should be succinct and offer a compelling customer benefit.

Section 8: Operational Costs

8.1 Production

Insert a summary of each stage of your production process in this part of your business plan template. If you do not create a product, use this section to summarise each of the key steps involved in delivering your service. This will quickly highlight any weaknesses in your operational process and allow you to make improvements.

8.2 Delivery to Customers

A key stage for any business, is delivery of the product of service to the customer. Explain in this part of your business plan template, how you intend to manage this stage. Will you deliver personally or use a logistics company as a supply partner?

8.3 Payment Methods and Terms

Insert how you intend to manage the product or service purchase stage in this part of your business plan template. Whether you intend to do business online, offline or both – you need to put plans in place that allow your customers to pay safely and securely within your terms of business.

8.4 Supply Partners

Insert a summary of your key supply partners in this part of your business plan template. As a minimum for each, you will want to summarise: name of supplier, website address, product or service required, cost implications and payment terms agreed.

8.5 Premises

Unless you are working from home, you will need to plan for the cost of premises. Insert the cost of these premises here together with key information about any rental agreement that you have to commit to and for how long. It also makes sense to list in this part of your business plan template any other running costs associated with the premises like electricity.

8.6 Tools and Equipment

Insert in this part of your business plan template all of the tools, systems and software licence costs that are associated with delivering your product or service to the customer. For instance, most businesses will incur telephone costs and many will pay for software to manage customer transactions and business accounting.

8.7 Transport

Insert transport related costs in this part of your business plan template. Does your business need to incur transport costs? This could be to deliver services to customers, or conduct the operations of the business.

8.8 Legal Requirements

Insert a summary of the legal requirements of your business in this part of your business plan template. For instance, if you are running a coffee shop, do you require a food and drink license. If so, how much will it cost? And what conditions will you need to fulfil to get one?

8.9 Insurance Requirements

Many business models require you to have insurance in place to operate. For instance, if you are running a shop, you are expected to put public liability insurance in place. Or if you are providing professional advice, you will want to protect yourself from being sued by putting professional negligence insurance in place. The cost of this insurance is important to account for in this part of your business plan template

8.10 Management and Staff

Finally, insert in this part of your business plan template the cost of all of the staff you will need to deliver the products and services you have specified in your plan.

Section 9: Costs and Pricing Strategy

9.1 Cost Breakdown

Taken all of the costs that you have identified in the previous section of your business plan template and separate them into:

Overhead (or fixed) costs, which you will incur whether you sell any products or services or not, for example rent of premises

Variable costs, which you only incur in relation to each additional product or service sale, for example customer delivery costs

9.2 Total Cost per Unit

Using the information from 9.1 above, you will be able to calculate the cost of delivering a given number of units per month in this part of your business plan template. You will also be able to see how the cost per unit decreases as the volume of sales increases. This is because you can spread your overhead costs over more customer sales.

9.3 Price per Unit

Now you have an understanding of the cost per unit, you will be able to determine the price per unit that you intend to charge customers. This should take into consideration your competitor research to ensure you are competitive. It should also take into consideration your cost per sale to ensure your price allows you to make a realistic profit on each sale.

9.4 Profit Margin ($)

In light of your answers to 9.2 and 9.3 above, insert in this part of your business plan template the profit margin you are planning to make per unit sale.

Section 10: Financial Forecasts

10.1 Sales Forecast

Insert your monthly sales forecast in this part of your business plan template. If you are not already trading, this is at best a guess and so we would recommend that you take a pessimistic or worst-case view of what you might be able to achieve each month. This will help to ensure that your cashflow forecast (below) is not compromised.

10.2 Cost Forecast

You should be able to take the operational cost information that you put together in Section 8 and accurately forecast what your month to month costs are going to be for the year ahead. This will then act as your cost budget to ensure that you do not spend more each month than you planned to.

10.3 Breakeven Analysis

If you map your sales forecast, your fixed monthly costs and your variable costs onto a line graph, you will be able to see how many months it will take for your business to breakeven and start making a profit. You will also be able to see the extent to which you are going to need to raise funds, or self-fund your business until it starts to pay its own way.

10.4 Forecast Cashflow

Key to the success of any small business is the management of your cashflow. Creating a cashflow forecast is easy to complete in any good small business accounting application like Quickbooks or Xero. We recommend that you include this in this part of your business plan template. And then keep it up to date as it will change from week to week according to how your business trades.

The Juice Press

This article provides you with a free business plan template, which you can use to help you write your business plan. Research proves that you are 30% more likely to succeed if you put a business plan in place. However, if you want to take things to the next level, consider using a business plan creation tool. We recommend LivePlan, which provides over 500 different business plan templates for you to choose from.

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About the Author

Julia is a staff writer for SmallbizJuice, specializing in starting a business and startups. Over the last 13 years, Julia has been involved in two business startups and also led starting her own business, which she sold successfully before starting a family. Outside of work, Julia volunteers at her kid’s school and a writes children’s stories when time allows.